To survive in a dynamic and hyper-competitive business environment, firms are compelled to
simultaneously introduce incremental and radical innovations. While it is recognised that business
intelligence and analytics (BI&A) can support innovation and provide organisational value,
the literature provides a limited understanding of its impact on balancing different innovation
activities and ensuring performance gains. In this study, we examine the relationship between BI
&A use, innovation ambidexterity, and firm performance by relying on the process theory of IS
value creation as well as the dynamic capabilities perspective. We test our model using data
collected from medium- and large-sized firms in Slovenia, applying partial least squares modelling.
The results support the notion that BI&A use is positively associated with successful
balancing between explorative and exploitative innovation activities, which in turn enhances
firm performance. Our results also indicate that innovation ambidexterity is enhanced in two
ways: indirectly through interaction with the firm’s absorptive capacity, and directly by increasing
the possibilities of faster experimentation with offerings of products or services and
improved predictability of the value of new products or services.